Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 
Date of Report (Date of earliest event reported): May 7, 2018

 
CARBONITE, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-35264
 
33-1111329
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
Two Avenue de Lafayette, Boston, Massachusetts 02111
(Address of principal executive offices, including ZIP code)
(617) 587-1100
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
¨
Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §230.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 





Item 2.02
Results of Operations and Financial Condition
On May 7, 2018, Carbonite, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished under this Item 2.02, including Exhibit 99.1 incorporated by reference herein, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01
Regulation FD Disclosure
In connection with the issuance of the press release attached hereto as Exhibit 99.1, the Company is holding a public conference call and webcast on May 7, 2018, at 5:30 p.m. ET, during which the Company will provide the investor presentation attached as Exhibit 99.2 to this Current Report. The presentation will also be posted on the investor relations portion of the Company’s website.
The information furnished under this Item 7.01, including Exhibit 99.1 and Exhibit 99.2 incorporated by reference herein, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
    
Item 9.01
Exhibits
 
(d)
Exhibits.
 
99.1
 
99.2





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized on May 7, 2018.
 
 
CARBONITE, INC.
 
 
 
 
By:
/s/ Danielle Sheer
 
Name:
Danielle Sheer
 
Title:
General Counsel


Exhibit


Exhibit 99.1
Carbonite Announces First Quarter 2018 Financial Results
Financial and Operating Results Highlight Strong Start to the Year
BOSTON, MA - May 7, 2018 - Carbonite, Inc. (NASDAQ: CARB), a leader in data protection, today announced financial results for the quarter ended March 31, 2018.
First Quarter 2018 Highlights:
Revenue of $64.0 million increased 12% year-over-year.
Non-GAAP revenue of $64.9 million increased 10% year-over-year.1 
Bookings of $67.6 million increased 9% year-over-year.2 
Net income per share was $0.42 (basic) and $0.40 (diluted), as compared to $0.27 in 2017 (basic and diluted).
Non-GAAP net income per share was $0.29 (basic) and $0.27 (diluted), as compared to $0.09 (basic and diluted) in 2017.4 
“Q1 was a great start to the year for Carbonite. We closed the Mozy acquisition, and we started integrating and onboarding the team. We continue to successfully execute our strategy, building the leading data protection platform for businesses, positioning us well to serve a large and growing market opportunity,” said Mohamad Ali, CEO of Carbonite.
“In the first quarter we delivered financial results that were at or above the top of our guidance range. At the same time, we are making the system and platform investments that will allow us to continue to drive meaningful operating synergies over time. Our Q1 results coupled with the acquisition of Mozy position us well for continued growth and profitability expansion,” said Anthony Folger, CFO of Carbonite.
The Company uses a variety of operational and financial metrics, including non-GAAP financial measures, to evaluate its performance and financial condition. The accompanying financial data includes additional information regarding these metrics and a reconciliation of non-GAAP financial information to GAAP. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
First Quarter 2018 Results:
Revenue for the first quarter was $64.0 million, an increase of 12% from $57.1 million in the first quarter of 2017. Non-GAAP revenue for the first quarter was $64.9 million, an increase of 10% from $59.1 million in the first quarter of 2017.1 
Bookings for the first quarter were $67.6 million, an increase of 9% from $62.1 million in the first quarter of 2017.2 
Gross margin for the first quarter was 71.4%, compared to 69.6% in the first quarter of 2017. Non-GAAP gross margin was 76.1% in the first quarter, compared to 73.8% in the first quarter of 2017.3 
Net income for the first quarter was $11.9 million, compared to net income of $7.6 million in the first quarter of 2017. Non-GAAP net income for the first quarter was $8.1 million, compared to non-GAAP net income of $2.5 million in the first quarter of 2017.4 
Net income per share for the first quarter was $0.42 (basic) and $0.40 (diluted), compared to net income per share of $0.27 (basic and diluted) in the first quarter of 2017. Non-GAAP net income per share was $0.29 (basic) and $0.27 (diluted) for the first quarter, compared to non-GAAP net income per share of $0.09 (basic and diluted) in the first quarter of 2017.4 
Cash flow from operations for the first quarter was $3.3 million, compared to $7.6 million in the first quarter of 2017. Adjusted free cash flow for the first quarter was $2.4 million, compared to $2.3 million in the first quarter of 2017.5 
 
1 
Non-GAAP revenue excludes the impact of purchase accounting adjustments for acquisitions.
2 
Bookings represent the aggregate dollar value of customer subscriptions and software arrangements, which may include multiple revenue elements, such as software licenses, hardware, professional services and post-contractual support, received during a period and are calculated as revenue recognized during a particular period plus the change in total deferred revenue, excluding deferred revenue recorded in connection with acquisitions, divestitures and the adoption impact of Topic 606, net of foreign exchange and the change in unbilled revenue during the same period.
3 
Non-GAAP gross margin excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, and acquisition-related expense.
4 
Non-GAAP net income and non-GAAP net income per share excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense,





restructuring-related expense, acquisition-related expense, non-cash convertible debt interest expense and the income tax effect of non-GAAP adjustments.
5 
Adjusted free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to acquisitions, restructuring, and litigation from net cash provided by operating activities.

Business Outlook

Based on the information available as of May 7, 2018, Carbonite expects the following for the second quarter and full year of 2018:

Second Quarter 2018:
 
Current Guidance
(5/7/2018)
GAAP Revenue
$75.8 - $77.8 million
Non-GAAP Revenue
$78.0- $80.0 million
Non-GAAP Net Income Per Share
$0.34 - $0.38

Full Year 2018:
 
Prior Guidance
(2/13/2018)
Current Guidance
(5/7/2018)
Business Bookings
$223.8 - $234.8 million
$223.8 - $234.8 million
Consumer Bookings Y/Y Growth
5% - 15% growth
5% - 15% growth
GAAP Revenue
$294.0 - $304.0 million
$296.9 - $306.9 million
Non-GAAP Revenue
$302.5 - $312.5 million
$302.5 - $312.5 million
Non-GAAP Net Income Per Share (Diluted)
$1.45 - $1.55
$1.51 - $1.59
Non-GAAP Gross Margin
76.0% - 77.0%
76.0% - 77.0%
Adjusted Free Cash Flow
$32.0 - $38.0 million
$32.0 - $38.0 million
Carbonite’s expectations of non-GAAP net income per share for the second quarter and full year of 2018 excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, non-cash convertible debt interest expense, and the income tax effect of non-GAAP adjustments. Non-GAAP net income per share assumes an effective tax rate of 8% for the full year of 2018. Non-GAAP net income per share assumes fully-diluted weighted average shares outstanding of approximately 31.2 million for the second quarter and 31.3 million for the full year of 2018.
Conference Call and Webcast Information
Carbonite will host a conference call on Monday, May 7, 2018 at 5:30 p.m. ET to review these results. This call will be webcast live and can be found in the investor relations section of the Company's website at http://investor.carbonite.com. The conference call can also be accessed by dialing (877) 303-1393 in the United States or (315) 625-3228 internationally with the passcode 9759657.
Following the completion of the call, a recorded replay will be available on the Company’s website, http://investor.carbonite.com, under “Events & Presentations”.
Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-GAAP financial measures, including bookings, non-GAAP revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP net income per share, non-GAAP operating expense and adjusted free cash flow.
The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and ordinary results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in





evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures provided in the tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.
With respect to our expectations under "Business Outlook" above, the Company has not reconciled non-GAAP net income per share to net income per share in this press release because we do not provide guidance for stock-based compensation expense, litigation-related expense, acquisition-related expense, amortization expense on intangible assets, non-cash convertible debt interest expense, and the income tax effect of non-GAAP adjustments as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
Cautionary Language Concerning Forward-Looking Statements
Certain matters discussed in this press release, including under “Business Outlook,” have "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to integrate Mozy into our operations and achieve the expected benefits of the acquisition, our ability to profitably attract new customers and retain existing customers, our dependence on the market for cloud backup services, our ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry, and those discussed in the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (the "SEC"), which is available on www.sec.gov, and elsewhere in any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances.
About Carbonite
Carbonite provides a robust Data Protection Platform for businesses, including backup, disaster recovery, high availability and workload migration technology. The Carbonite Data Protection Platform supports businesses, in locations around the world with secure global cloud infrastructure. To learn more visit www.Carbonite.com.
Investor Relations Contact:
Jeremiah Sisitsky
Carbonite
781-928-0713
investor.relations@carbonite.com

Media Contacts:

Caitlin O'Malley
Carbonite
781-928-0762
media@carbonite.com










Carbonite, Inc.
Consolidated Statement of Operations (unaudited)
(In thousands, except share and per share amounts)

 
Three Months Ended
March 31,
 
2018
 
2017
Revenue:
 
 
 
Services
$
54,574

 
$
50,115

Product
9,452

 
6,984

Total revenue
64,026

 
57,099

Cost of revenue:
 
 
 
Services
15,330

 
15,283

Product
557

 
446

Amortization of intangible assets
2,425

 
1,626

Total cost of revenue
18,312

 
17,355

Gross profit
45,714

 
39,744

Operating expenses:
 
 
 
Research and development
12,519

 
10,327

General and administrative
14,460

 
12,769

Sales and marketing
19,860

 
23,071

Amortization of intangible assets
939

 
450

Restructuring charges
862

 

Total operating expenses
48,640

 
46,617

Loss from operations
(2,926
)
 
(6,873
)
Interest expense
(2,601
)
 
(222
)
Interest income
244

 
20

Other income (expense), net
12

 
280

Loss before income taxes
(5,271
)
 
(6,795
)
Benefit for income taxes
(17,215
)
 
(14,390
)
Net income
$
11,944

 
$
7,595

Net income per share:
 
 
 
Basic
$
0.42

 
$
0.27

Diluted
$
0.40

 
$
0.27

Weighted-average shares outstanding:
 
 
 
Basic
28,341,633

 
27,821,596

Diluted
30,043,783

 
28,504,811







Carbonite, Inc.
Consolidated Balance Sheets (unaudited)
(In thousands)
 
 
March 31, 2018
 
December 31, 2017
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
71,009

 
$
128,231

Trade accounts receivable, net
31,159

 
22,219

Prepaid expenses and other current assets
8,680

 
6,823

Total current assets
110,848

 
157,273

Property and equipment, net
38,622

 
28,790

Other assets
10,844

 
804

Acquired intangible assets, net
138,595

 
44,994

Goodwill
157,215

 
80,958

Total assets
$
456,124

 
$
312,819

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
9,561

 
$
10,842

Accrued expenses
25,165

 
21,675

Current portion of deferred revenue
116,859

 
100,241

Total current liabilities
151,585

 
132,758

Long-term debt
203,398

 
111,819

Deferred revenue, net of current portion
27,467

 
24,273

Other long-term liabilities
6,230

 
5,704

Total liabilities
388,680

 
274,554

Stockholders’ equity
 
 
 
Common stock
305

 
301

Additional paid-in capital
237,883

 
233,343

Treasury stock, at cost
(27,166
)
 
(26,616
)
Accumulated deficit
(143,520
)
 
(169,344
)
Accumulated other comprehensive income
(58
)
 
581

Total stockholders’ equity
67,444

 
38,265

Total liabilities and stockholders’ equity
$
456,124

 
$
312,819








Carbonite, Inc.
Consolidated Statement of Cash Flows (unaudited)
(In thousands)
 
 
Three Months Ended
March 31,
 
2018
 
2017
Operating activities
 
 
 
Net income
$
11,944

 
$
7,595

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
6,077

 
4,884

Amortization of deferred costs
424

 

Loss on disposal of equipment
58

 

Impairment of capitalized software
653

 

Stock-based compensation expense
3,737

 
2,777

Benefit for deferred income taxes
(17,662
)
 
(14,842
)
Non-cash interest expense related to amortization of debt discount
1,543

 

Other non-cash items, net
66

 
(385
)
Changes in assets and liabilities, net of acquisition:
 
 
 
Accounts receivable
(4,616
)
 
1,212

Prepaid expenses and other current assets
86

 
(384
)
Other assets
(2,211
)
 
(927
)
Accounts payable
(4,214
)
 
3,322

Accrued expenses
3,016

 
(689
)
Other long-term liabilities
252

 
(96
)
Deferred revenue
4,138

 
5,094

Net cash provided by operating activities
3,291

 
7,561

Investing activities
 
 
 
Purchases of property and equipment
(3,288
)
 
(6,568
)
Proceeds from sale of property and equipment and businesses
330

 
295

Proceeds from maturities of derivatives

 
370

Purchases of derivatives
(1,403
)
 
(403
)
Payment for intangibles
(1,250
)
 

Payment for acquisition, net of cash acquired
(144,603
)
 
(59,740
)
Net cash used in investing activities
(150,214
)
 
(66,046
)
Financing activities
 
 
 
Proceeds from exercise of stock options
726

 
2,445

Payments of withholding taxes in connection with restricted stock unit vesting
(550
)
 
(524
)
Proceeds from long-term borrowings, net of debt issuance costs
88,984

 
39,063

Net cash provided by financing activities
89,160

 
40,984

Effect of currency exchange rate changes on cash
541

 
27

Net decrease in cash, cash equivalents and restricted cash
(57,222
)
 
(17,474
)
Cash, cash equivalents and restricted cash, beginning of period
128,231

 
59,287

Cash, cash equivalents and restricted cash, end of period
$
71,009

 
$
41,813








Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)

Reconciliation of GAAP Revenue to Non-GAAP Revenue
 
Three Months Ended
March 31,
 
2018
 
2017
GAAP revenue
$
64,026

 
$
57,099

Add:
 
 
 
Fair value adjustment of acquired deferred revenue
882

 
1,988

Non-GAAP revenue
$
64,908

 
$
59,087


Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
 
Three Months Ended
March 31,
 
2018
 
2017
Gross profit
$
45,714

 
$
39,744

Gross margin
71.4
%
 
69.6
%
Add:
 
 
 
Fair value adjustment of acquired deferred revenue
882

 
1,988

Amortization of intangibles
2,425

 
1,626

Stock-based compensation expense
325

 
231

Acquisition-related expense
54

 
18

Non-GAAP gross profit
$
49,400

 
$
43,607

Non-GAAP gross margin
76.1
%
 
73.8
%


































Calculation of Non-GAAP Net Income and Non-GAAP Net Income per Share
 
Three Months Ended
March 31,
 
2018
 
2017
Net income
$
11,944

 
$
7,595

Add:
 
 
 
Fair value adjustment of acquired deferred revenue
882

 
1,988

Amortization of intangibles
3,364

 
2,076

Stock-based compensation expense
3,737

 
2,777

Litigation-related expense
17

 
55

Restructuring-related expense
862

 

Acquisition-related expense
3,620

 
3,023

Non-cash convertible debt interest expense
1,543

 

Less:
 
 
 
Income tax effect of non-GAAP adjustments
17,845

 
14,985

Non-GAAP net income
$
8,124

 
$
2,529

GAAP net income per share:
 
 
 
Basic
$
0.42

 
$
0.27

Diluted
$
0.40

 
$
0.27

Non-GAAP net income per share:
 
 
 
Basic
$
0.29

 
$
0.09

Diluted
$
0.27

 
$
0.09

GAAP weighted-average shares outstanding:
 
 
 
Basic
28,341,633

 
27,821,596

Diluted
30,043,783

 
28,504,811

Non-GAAP weighted-average shares outstanding:
 
 
 
Basic
28,341,633

 
27,821,596

Diluted
30,043,783

 
28,504,811








Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
 
 
Three Months Ended
March 31,
 
2018
 
2017
Research and development
$
12,519

 
$
10,327

Less:
 
 
 
Stock-based compensation expense
687

 
309

Acquisition-related expense
35

 
69

Non-GAAP research and development
$
11,797

 
$
9,949

 
 
 
 
General and administrative
$
14,460

 
$
12,769

Less:
 
 
 
Stock-based compensation expense
2,124

 
1,957

Litigation-related expense
17

 
55

Acquisition-related expense
3,490

 
2,901

Non-GAAP general and administrative
$
8,829

 
$
7,856

 
 
 
 
Sales and marketing
$
19,860

 
$
23,071

Less:
 
 
 
Stock-based compensation expense
601

 
280

Acquisition-related expense
41

 
35

Non-GAAP sales and marketing
$
19,218

 
$
22,756

 
 
 
 
Amortization of intangible assets
$
939

 
$
450

Less:
 
 
 
Amortization of intangible assets
939

 
450

Non-GAAP amortization of intangible assets
$

 
$

 
 
 
 
Restructuring charges
$
862

 
$

Less:
 
 
 
Restructuring-related expense
862

 

Non-GAAP restructuring charges
$

 
$








Reconciliation of Revenue to Bookings
 
 
Three Months Ended
March 31,
 
2018
 
2017
GAAP revenue
$
64,026

 
$
57,099

Add:
 
 
 
Change in deferred revenue
19,812

 
14,276

Deferred revenue divested
288

 

Impact of Topic 606 adoption
3,998

 

Less:
 
 
 
Impact of foreign exchange
421

 
153

Beginning deferred revenue from acquisitions
19,610

 
9,100

Change in unbilled revenue
505

 

Change in deferred revenue and adjustments
3,562

 
5,023

Bookings
$
67,588

 
$
62,122


Calculation of Adjusted Free Cash Flow
 
 
Three Months Ended
March 31,
 
2018
 
2017
Net cash provided by operating activities
$
3,291

 
$
7,561

Subtract:
 
 
 
Purchases of property and equipment
3,288

 
6,568

Free cash flow
3

 
993

 
 
 
 
Add:
 
 
 
Acquisition-related payments
1,647

 
1,230

Restructuring-related payments
665

 

Litigation-related payments
127

 
32

Adjusted free cash flow
$
2,442

 
$
2,255



carbq1financialresultssl
Carbonite, Inc. Q1 2018 Financial Results May 7, 2018 1


 
Safe harbor statement Certain matters discussed in this press release, including under “Business Outlook,” have "forward-looking statements“ intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should,“ "will," "would" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to integrate Mozy into our operations and achieve the expected benefits of the acquisition, our ability to profitably attract new customers and retain existing customers, our dependence on the market for cloud backup services, our ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry, and those discussed in the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (the "SEC"), which is available on www.sec.gov, and elsewhere in any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances. This presentation contains non-GAAP financial measures including, but not limited to, Bookings, non-GAAP Revenue, non-GAAP Gross Margin, non-GAAP Net Income and non-GAAP Net Income Per Share, and Adjusted Free Cash Flow. A reconciliation to GAAP can be found in the financial schedules included in our most recent earnings press release located on Carbonite’s website, http://investor.carbonite.com, in the Company’s filings or with the SEC at www.sec.gov. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. carbonite.com 2


 
Financial results conference call details What: Carbonite Q1 2018 Financial Results Conference Call When: Monday, May 7, 2018 Time: 5:30 p.m. ET Live Call: 877-303-1393 (U.S.) 315-625-3228 (International) Conference ID: 9759657 Live / Recorded Webcast: http://investor.carbonite.com carbonite.com 3


 
Definitions of non-GAAP measures Bookings: Bookings represent the aggregate dollar value of customer subscriptions and software arrangements, which may include multiple revenue elements, such as software licenses, hardware, professional services and post-contractual support, received during a period and are calculated as revenue recognized during a particular period plus the change in total deferred revenue, excluding deferred revenue recorded in connection with acquisitions and divestitures, net of foreign exchange and the change in unbilled revenue during the same period. Non-GAAP revenue: Excludes the impact of purchase accounting adjustments in connection with acquisitions. Non-GAAP gross margin: Excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, and acquisition-related expense. Non-GAAP net income and non-GAAP net income per share: Non-GAAP net income and non-GAAP net income per share excludes the impact of purchase accounting adjustments on acquired deferred revenue, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, non-cash convertible debt interest expense and the income tax effect of non-GAAP adjustments. Adjusted Free cash flow: Adjusted free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to acquisitions, restructuring, and litigation from net cash provided by operating activities. carbonite.com 4 For a full reconciliation of GAAP to non-GAAP, please visit the investor relations portion of the Carbonite web site – investor.carbonite.com


 
Annual meeting What: Carbonite Annual Meeting When: May 8, 2018 Time: 9:00 a.m. ET Location: www.virtualshareholdermeeting.com/carb2018 Carbonite is hosting a virtual annual meeting. To participate in the meeting please visit the above site five minutes before the start of the meeting and be sure to have the information sent to holders of record as of March 15, 2018. carbonite.com 5


 
Summary results • Delivered strong financial results • Announced and closed acquisition of Mozy • Carbonite Recover – Disaster-Recovery-as-a-Service offering in market • Launched Breach – a highly-rated podcast focused on the biggest security breaches in history carbonite.com 6


 
Mozy update • Integration going as planned • Successfully onboarding team • Expanding partnership with Dell / EMC • Phasing out Mozy brand by early 2019, with all product offerings shifting to Carbonite brand carbonite.com 7


 
Carbonite Data Protection Console • New unified Carbonite Data Protection Console, Coming soon! • Unified portal experience across all customer use cases carbonite.com 8


 
Breach, a new podcast investigating data security breaches • Already downloaded more than 100,000 times, Season one takes an in-depth look at the biggest breaches in history and calls attention to the importance of having a data protection plan in place. • Hosted by Bob Sullivan, an award-winning journalist and tech expert, and seasoned podcast producer Alia Tavakolian, Breach investigates high-profile data breaches and what they mean for businesses, consumers and the future of data privacy. https://www.carbonite.com/podcasts/breach carbonite.com 9


 
Summary Q1 financial results Q1 2018 Outlook Q1 2018 Results GAAP Revenue $61.7 M to $63.7 M $64.0 M (+12% YoY) Non-GAAP Revenue $63.0 M to $65.0 M $64.9 M (+10% YoY) GAAP Net Income Per Share Not guided $0.42 / $0.40 (Basic / Diluted) Non-GAAP Net Income Per Share $0.20 to $0.24 $0.29 /$0.27 (Basic / Diluted) Consumer Bookings Not guided $22.0 (0% YoY) Business Bookings Not guided $45.6 M (+14% YoY) Non-GAAP Gross Margin Not guided 76.1% (+231 Bps YoY) Adjusted Free Cash Flow Not guided $2.4 M *With respect to expectations under “Q1 2018 Outlook" above, the Company has not reconciled non-GAAP net income per share to net income per share because we do not provide guidance for stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, amortization expense on intangible assets and the income tax effect of non-GAAP adjustments as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. carbonite.com 10 Source: SEC Filings; For a full reconciliation of GAAP to non-GAAP, please visit the investor relations portion of the Carbonite web site – investor.carbonite.com


 
Bookings, revenue and gross margin Q1 ‘18 YoY Quarterly non-GAAP Revenue ($M) and Quarterly Bookings ($M) growth non-GAAP gross margin (%) $67.6 $62.1 $63.9 +9% $70 80% $59.7 $60.2 $64.9 $65 $63.1 $62.8 $22.0 $20.9 $61.1 $22.0 0% $59.1 $19.5 $19.4 $60 77.6% $45.6 $43.0 $55 $40.8 +14% 76.3% 76.1% $40.1 $40.2 75% $50 $32.2 +18% $29.3 $30.0 74.1% $27.3 $27.6 $45 73.8% $40 $35 70% Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Consumer Bookings Subscription Business Bookings Business Bookings carbonite.com 11 Approximate, may not foot due to rounding. Source: SEC Filings and company estimates; For a full reconciliation of GAAP to non-GAAP, please visit the investor relations portion of the Carbonite web site – investor.carbonite.com


 
Business outlook (as of May, 7 2018)* Q2 2018 FY 2018 FY ‘18 Growth Outlook Outlook (at midpoint) GAAP Revenue $75.8 M to $77.8 M $296.9 M to $306.9 M +26% Non-GAAP Revenue $78.0 M to $80.0 M $302.5 M to $312.5 M +25% Non-GAAP Net Income Per Share (Diluted) $0.34 to $0.38 $1.51 to $1.59 +96% Business Bookings Not guided $223.8 M to $234.8 M +40% Consumer Bookings YoY Growth Not guided 5% to 15% growth +1,000 Bps Non-GAAP Gross Margin Not guided 76.0% to 77.0% +100 Bps Adjusted Free Cash Flow Not guided $32.0 M to $38.0 M +73% *With respect to our expectations under "Business Outlook" above, the Company has not reconciled non-GAAP net income per share to net income (loss) per share because we do not provide guidance for stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, amortization expense on intangible assets, non-cash convertible debt interest expense, and the income tax effect of non-GAAP adjustments as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. carbonite.com 12 Source: SEC Filings; For a full reconciliation of GAAP to non-GAAP, please visit the investor relations portion of the Carbonite web site – investor.carbonite.com


 
Convertible security – share calculation Average stock Potential common price shares $30 772,000 $32 1,071,000 $34 1,336,000 $36 1,571,000 $38 1,781,000 $40 1,970,000 carbonite.com 13 Source: company estimates